M/s Krishi Upaj Mandi Samiti, Shajapur V. The ITO ward 2(1), Ujjain

ITA 205/IND/2013

• Counselvise Citation: 20522714 RSA 2013
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 16-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Charitable institution
• Section: 143(3); 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAALK0485D I.T.A.NO. 205 /IND/201 3 A.Y. : 2005-06 M/S. KRASHI UPAJ MANDI SAMITI, SHUJALPUR, SHAJAPUR. VS. ITO, WARD 2(1), UJJAIN APPELLANT RESPONDENT APPELLANT BY : SHRI S.S.DESHPANDE, C. A. RESPONDENT BY : SHRI R. A. VERMA, SR. DR DATE OF HEARING : 01 . 0 8 .201 3 DATE OF PRONOUNCEMENT : 12 . 0 8 .201 3 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE CIT(A) DATED 30 TH JANUARY, 2013, FOR THE ASSESSMENT YEAR 2005-06 IN THE MATTER OF ORDER PASSED U/S 143( 3)/251 OF THE INCOME-TAX ACT, 1961. 2. ONLY GRIEVANCE OF THE ASSESSEE RELATES TO ALLOWING DEDUCTION OF 15 % ON THE AMOUNT OF NET RECEIPTS RATHER THAN G ROSS INCOME, -: 2: - 2 WHILE COMPUTING INCOME OF CHARITABLE INSTITUTION GR ANTED REGISTRATION U/S 12A OF THE INCOME-TAX ACT, 1961. 3. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. THE BRIEF FACTS OF THE CASE ARE THAT THE A SSESSEE IS A KRISHI UPAJ MANDI SAMITI (KUMS) AND ENJOYING THE STATUS OF LOCAL AUTHORITY. ORIGINAL ASSESSMENT IN THIS CASE WAS COM PLETED U/S 143(3) ON 18.12.2007 DETERMINING TOTAL INCOME AT RS . 84,65,350/-. THE ASSESSEE HAS FILED THE APPEAL BEFORE CIT(A) AND CIT(A) VIDE ORDER DATED 7.1.2009 IN APPEAL NO. 497/07-08 HAS DI SMISSED THE APPEAL. THE ASSESSEE HAS FILED THE APPEAL BEFORE I. T.A.T., INDORE AND HON'BLE I.T.A.T., INDORE VIDE ORDER IN I.T.A.NO. 11 7/IND/009 DATED 19.6.2009, SET-ASIDE THE ASSESSMENT TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO DECIDE THE ISSUE OF A PPLICABILITY OF SECTION 11 TO 13 OF THE INCOME-TAX ACT, IN THE LIGH T OF REGISTRATION GRANTED U/S 12/12AA OF THE INCOME-TAX ACT, 1961. TH E ASSESSING OFFICER HAS EXAMINED THE CASE WITH REFERENCE TO TH E DIRECTION OF THE I.T.A.T. AND AFTER MAKING ADDITION ON ACCOUNT OF AA RKASHIT NIDHI AT RS. 7,63,754/- AND ALLOWING RELIEF OF 15 % SET APAR T AT RS. 12,33,152/- AND GAUSHALA ANUDAN AT RS. 2,31,000/-, ASSESSED INCOME AT RS. 69,99,200/-. -: 3: - 3 4. FROM THE RECORD, WE FIND THAT ONE OF THE GROUNDS TA KEN BEFORE THE CIT(A) WAS WITH REGARD TO GRANTING DEDUC TION U/S 11(1)(A) @ 15% OF THE GROSS INCOME DETERMINED AS AGAINST NET INCOME, WAS DISMISSED BY THE LD.CIT(A) ON THE PLEA THAT THIS GR OUND WAS NOT PRESSED BEFORE HER. IT WAS ARGUED BY THE LD. AUTHOR IZED REPRESENTATIVE THAT AFTER RECEIPT OF ORDER OF THE TRIBUNAL FOR GRANTING REGISTRATION U/S 12A, THE ASSESSEE HAS FIL ED REVISED COMPUTATION OF INCOME. AS PER THE REVISED COMPUTATI ON, THE ASSESSEE WAS ELIGIBLE FOR CLAIM OF DEDUCTION @ 15% OF THE GROSS RECEIPT U/S 11(1)(A). IT APPEARS THAT NEITHER THE A SSESSING OFFICER NOR CIT(A) HAS EXAMINED THE ASSESSEES CLAIM OF DED UCTION U/S 11(1)(A) WITH REFERENCE TO THE AUDIT REPORT FILED BY THE ASSESSEE REGARDING APPLICATION OF FUND. WE FOUND THAT THE TR IBUNAL HAVE RESTORED THE MATTER VIDE ITS ORDER DATED 19.6.2009 WITH A DIRECTION TO DECIDE THE ISSUE OF APPLICABILITY OF SECTION 11 TO 13 IN THE LIGHT OF REGISTRATION GRANTED U/S 12A/12AA OF THE INCOME-TAX ACT, 1961. WE FOUND THAT IN THE SET-ASIDE PROCEEDINGS, THE ASSESS ING OFFICER HAS NOT PROPERLY APPRECIATED THE APPLICATION OF FUND TO WARDS CHARITABLE ACTIVITIES. AS PER PROVISIONS OF SECTION 11(1)(A), THE ASSESSEE IS ELIGIBLE FOR DEDUCTION OF 15 % ON THE GROSS RECEIPT , WHICH IS NOT -: 4: - 4 ACTUALLY UTILIZED FOR THE PURPOSE AND OBJECT OF THE ASSESSEE TRUST. IN THE INTEREST OF JUSTICE AND FAIR PLAY, THE MATTER IS RESTORED BACK TO THE FILE OF A.O. FOR DECIDING AFRESH THE APPLICATIO N OF FUNDS FOR CHARITABLE OBJECT AND APPLICABILITY OF SECTION 11 T O 13 OF THE INCOME- TAX ACT, 1961, IN THE LIGHT OF REGISTRATION GRANTED TO IT U/S 12A/12AA OF THE INCOME-TAX ACT, 1961. THE ASSESSEE IS ALSO DIRECTED TO FILE REVISED CERTIFICATE OF C. A. REGAR DING UTILIZATION OF FUND FOR MEETING ITS OBJECT ACCUMULATION OF FUNDS A S PER PERMISSIBLE LIMITS LAID DOWN UNDER LAW. THE ASSESSING OFFICER I S TO DECIDE AFRESH AS PER LAW AFTER AFFORDING REASONABLE OPPORTUNITY O F BEING HEARD. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 12 TH AUGUST, 2013. SD/ - (JOGINDER SINGH) S D/ - (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 12 TH AUGUST, 2013. CPU* 258